As an undergraduate at UC San Diego, Martin Arreola immersed himself in the start-up scene on campus – organizing a hackathon for student entrepreneurs and keeping tabs on fledgling companies springing up in research labs and dorm rooms.

The experience led Arreola to be recruited to join a new early stage venture capital fund that taps university students throughout the country to find the best on-campus entrepreneurs for potential seed funding.

Contrary Capital, officially launched last month, is the brainchild of Eric Tarczynski, a 25-year old New Jersey native who spent two years traveling the country to put together a team of about 100 students at 50 campuses.

Students receive a tiny equity stake in the companies backed by Contrary Capital – which counts as investors the founders of Tesla, SoFi, MuleSoft and Twitch, among others.

Contrary Capital’s first two investments include UC San Diego start-up Additive Rocket Corp. Founded in 2015 by recent graduates Andy Kieatiwong and Kyle Adriany, Additive Rocket has developed technology to design and manufacturer rocket engines using 3-D printers.

“We have consistently been able to reduce the weight by at least 50 percent, and that is everything in aerospace,” said Adriany. “Our big value add is we are able to design and manufacturer them so rapidly with 3-D printing that we can make each one custom to the exact mission.”

Tarczynski declined to say how big a bet Contrary Capital made on Additive Rocket, or how much the new fund has raised overall.

But Forbes reported that Contrary Captial’s first fund is expected to be in the $5 million to $7 million range.

Contrary Capital looks to invest $50,000 to $200,000 to help start-ups bridge a “huge gap” between what’s available from their universities’ entrepreneurial programs and the seed capital needed to move beyond the prototype/minimal viable product stage in their evolution.

“Usually you’re able to get $5,000 to $15,000 in non-dilutive funding from business planning competitions or your school’s entrepreneurial ventures,” said Tarczynski. “But it’s that next step to a true seed or small Series A round where the gap exists.”

In addition to Additive Rocket, Contrary Capital also has invested in Cortex Health out of Brigham Young University, which developed a software platform to manage follow-up patient visits.

Tarczynski hopes to fund 15 to 25 campus start-ups per year founded by students, faculty or recent graduates.

“The most successful tech companies of the past 20 years were started at universities across the U.S.,” he said. “The next generation will continue to emerge from universities.”

Contrary Capital

Eric Tarczynski, left, with some student partners in Contrary Capital, stopped for a photo in the Bay Area

Eric Tarczynski, left, with some student partners in Contrary Capital, stopped for a photo in the Bay Area (Contrary Capital)

Contrary Capital isn’t alone in targeting campus start-ups. Several venture funds nationwide focus on universities. At UC San Diego, they include the Triton Technology Fund and Osage University Partners, which provide early stage seed funding to start-ups.

With nine accelerators and incubators on campus nurturing young firms, there’s plenty of demand for additional capital, said Briana Weisinger, a start-up advocate with UC San Diego’s Office of Innovation and Commercialization.

“It’s definitely an area of need,” she said. “We call it getting over the valley of death. With that said, we do see investors – not many but some – who are investing earlier.”

Soham More, 20, a cognitive science major, is working with Contrary Capital at UC San Diego. He and fellow Contrary partner Nikhil Bose go to all entrepreneurial events on campus, talk to start- ups, track their progress and develop relationships with founders.

Students recruited by Contrary Capital receive training on performing due diligence on companies, such as looking at milestones, plans, customers or recent deals that confirm interest in the technology.

“The beauty of being on a college campus is you are surrounded by people who are pioneers in their field,” said More. “UCSD has a lot of pioneers in pretty much every field. So it is not hard to do due diligence.”

While the tiny equity stake does provide an incentive for More and Bose to be involved, it's not their key motivation. More, for example, is part of Sympto Health, a student start-up that’s developing a web app for cancer patients to record side effects of treatment for their oncologists.

“My goal down the line is to be a doctor,” he said. “As a doctor I can help 20 people a day. But through a product, through a company, you can help thousands of people. I think entrepreneurship is a way to deliver an impact that is an order of magnitude above everything else.”

Arreola, 23, graduated in August with a degree in biology. He’s currently working at the National Institute of Health and plans to pursue a graduate degree soon.

Arreola is no longer part of Contrary’s team at UC San Diego, but he hopes to join the group at his future grad school, which he hasn’t selected yet.

Arreola’s goal is to found a life science company.

“That has been my dream,” he said. “I have always been entrepreneurial. I am working with a start-up with friends at the moment. That is part of the reason why I joined Contrary — to get an inside look at other founders and how the venture capital world works.”

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